Social Security Crisis to Arrive Six Years Early

Think Social Security will be solvent until 2041? Think again. The next president will face rapidly growing problems by the end of his or her first term.

At the time, the concern was that the substantial Social Security surpluses we have experienced during the past 22 years would begin to shrink.

An updated version of a Congressional Budget Office chart I presented last year shows that the shrink has indeed begun (information is at the “data” link at this CBO page):

Social Security’s surplus for the year ended September 30, 2008, fell to $180.2 billion, reducing its subsidy to the rest of the government.

What? That’s right; I said “subsidy to the rest of the government.”

Social Security’s surpluses have been raked off by Uncle Sam and have subsidized the rest of the government since 1968, when President Johnson began “including Social Security and all other trust funds in a ‘unified budget.’”

At that point, as I wrote last year, “Social Security’s Trust Fund, instead of being a separate, untouchable stash of cash and investments (i.e., instead of being run like a normal pension plan), thus became money that the rest of the government could raid.”

And raid it they have, as you can see above. Since 1986, Social Security surpluses have subsidized the rest of the government to the tune of over $2.3 trillion, enabling reported deficits to be lower than they really have been. Social Security’s so-called “Trust Fund” consists of a stack of IOUs from Uncle Sam, who is now over $11 trillion in debt.

A year ago, the annual Social Security surpluses were expected to shrink to zero by 2017. That’s because, starting last year, the annual demographic wave of millions of baby boomers reaching the system’s minimum age of 62 for collecting began to hit. This wave will continue for the next two decades.

96 Comments, 96 Threads

1.
MD

Comments? What comments could be made regarding this? For years, a sizable amount of my paycheck has been going into Social Security. Now, appears as though, I’ll not be able to get any of this money back. Obviously, I’m not the only one in this situation. Again, I ask, what comments can be made regarding the theft of our savings?

Why would anyone be surprised by this? Both parties have spent our money without regards to any budget consideratons or consequences. To cover it up, they misrepresented themselves; explaining to those foolish enough to believe it that a “social security lock box” was protecting the money for everyone. Trust the Government??? I would recommend to anyone to reject any promise or statement made by a politician, or expect the exact opposite of what they say…it has been decades since there has been any substantial leadership for this country, and we are paying a huge price for the substandard leadership that exists at all levels of government.

The leftist will probably show up soon with their obfuscations and half-truths:

1. Let’s raise the cap on income subject to the tax. That will fix SS.

2. SS projections are based on too-pessimistic assumptions given historical growth rates

3. SS was never meant to be an income program, it’s an insurance program

4. SS privatization is just a sop to Wall Street, which will get paid a % of the assets

5. Given the market’s volatility, it isn’t safe enough for people to put their SS money into

6. People can’t be trusted to make their own decisions with their money

7. SS is the most popular government program

8. SS can be fixed by a combination of gradually raising taxes and raising the retirement age

Did I miss any? Of course, these are all somewhat true, but miss the bigger picture which is that SS is a Ponzi scheme that denies millions of Americans the ability to build a nest egg that they can leave to turn into an annuity for themselves upon retirement or leave to their heirs. If the government replaced SS with some sort of regulated savings program (you could only invest in “plain-vanilla” index funds, for example), the financial wealth built would be far more than that built by investing in Treasury bonds, which is the current situation.

The reason SS is so popular is because not one person in 100 thinks, when getting their monthly SS check, “If only I’d been able to invest at 5% returns during my working life rather than the 4% the government returned, this check would be almost 2/3 bigger than it is”. Do the math yourself and that’s with only a 1% annual return difference over a 50 year working lifespan. The real number is probably closer to 2%.

Those that paid in the most will have their “benefits” reduced or eliminated – after all they’s the rich and they’s must be punished for gett’n all that money off the backs of the welfare couch potato bobble heads shouting “we wants ours – its whats we’z de’serv”.

Two more thoughts:
1. Blaming the Democrats for Bush’s economic policies is not going to sell.
2. Privatizing Social Security was never a good idea. We can all see how “secure” private investments are. That’s not what retirees need.

It does make one wonder what our savings rate would be if the government didn’t take so much off the top? Economists are rightly concerned that we in the US don’t put enough away for the future. An additional 15% in your check would certainly help. That said, the gov is a) making it harder and b) buying votes now with money that should be invested for the future. Of course, the gov likes beggars because they are much easier to please than a free and financially independent populace.

George W. Bush was betrayed by the economic profession. He tried to do something—and was left hanging in the wind. The Democrats were able to demonize the issue. Those folks possessing advanced degrees in economics capitulated to the leftist establishment. They should be ashamed of themselves. Bush made a lot mistakes during his presidency. He was regrettably a Herbert Hoover progressive. Still, on this particular matter he tried to do the right thing.

Including promised future payments to SS, Medicare, and Medicaid, the U.S. government has a negative net worth of $60 trillion (from the “2008 Financial Report of the United States Government”, put out by the treasury department).

A huge majority of the American public want to tar and feather those who collected bonuses while running their companies into the ground, but blandly accept a congress and president doing the exact same thing on a much larger scale.

When Americans somehow wake up and grasp the obvious hypocrisy here, then we will be headed in the right direction. Until then, we’re toast.

– How can this be happening? I thought Pelosi, Reid, and the left all assured us several years ago that there was “no crisis.”

You have to understand, Tom – it’s all a question of timing.

We got exactly the same line of B.S. from Barney Frank, Maxine Waters and the rest of the Usual Suspects several years ago. During the Bush administration’s weak attempt to build support for better regulation of the GSEs, they openly ridiculed the notion by claiming, essentially, “there’s no crisis today, so kindly just STFU (we’re busy paying off our demographic)!!”

Apparently, recognition of a crisis requires that the left be in the driver’s seat so that – rather than avoid it, as common sense and reason would dictate – they’ll have the opportunity to exploit… oops… that is… “not ‘waste’ it”. Shades of Wilson, FDR and liberal fascism.

– … making even partially privatizing Social Security politically and financially unachievable. It appears that they’ve “won.”

Note the convergence that makes this destructive victory complete:

- SSI privatization is likely no longer feasible.
- The money market has been completely derailed through GSE insolvency.
- The number of Americans who pay no income tax (i.e., government employees plus the 50%+ filers with no or ‘negative’ tax liability) now comprises an electoral majority.
- Nationalization of industry is now accepted precedent.
- A plurality of Americans have been convinced that it is immoral to use our own natural resources.
- And now our judiciary has embarked upon legal misfeasance apparently intended to prove that, yes, our Constitution is in fact a suicide pact.

No Republic, not even the United States of America, can long survive this level of active destruction at the hands of its own government.

As usual, you don’t know what you’re talking about. With the appropriate time horizon, investments in corporate equities will always outperform Treasury bonds. Look at the historical data. Taking a snapshot view of 18 months of returns out of the 100+ years of stock market data is as intellectually dishonest as one can possibly get. In other words, SOP for you.

Jesus, I mean if we lose the ability to make basic statements of fact without leftist morons spewing lies and misdirection, we might as well just change the name of the country to Zimbabwe Junior and be done with it.

My last statement showed I paid over $100,000 and my employers paid over $100,000 into SS. That is equal to my mortgage and the money I spent to put three kids through college. There aren’t any Lexuses or Mercedes in the driveway, no boat, plane or second home. I’m definitely middle class.

I’m sure they won’t eliminate SS, they’ll just steal it back with taxes. “Well, you’ve got a pension, so you don’t need as much. You’ve got a 401K, so you don’t need it. We promised it, so here it is, but your gross income over x is taxed at 50%.”

Try living on that and not freezing to death when cap and trade gets going. NY state taxes and spending are out of control as well.

Well, maybe Mehsud will carry out his amazing strike on Washington, DC. I sure hope no innocent bystanders are harmed, but I wouldn’t shed many tears if a lot of thieves and swindlers got what they deserve. Madoff looks good in comparison. He didn’t force you to give him your money.

David S, nice try but no sale. Diversified investments suffered some losses but outperformed SS by a wide margin over the period I paid into Social Security. Blaming Bush for a problem that has existed since the program’s inception might work, because some people will believe anything. It won’t fix anything. When the money isn’t there, the system has a problem.

Roger, I’m convinced if a critical mass of Americans could learn how to use spreadsheet software and figure out compound annual growth rates and what they imply for future spending and tax rates, the Democratic Party would cease to exist overnight.

I know. I was just trying to show that even a 1% difference in compounded annual growth rates over a person’s working lifetime adds up to huge money.

Suffice it to say, my return from SS will be negative, so I can support good for nothing parasites like some of our esteemed PJ Media commenters in retirement. This is God’s little joke on me, I can feel it.

venividivici writes: “I’m convinced if a critical mass of Americans could learn how to use spreadsheet software and figure out compound annual growth rates and what they imply for future spending and tax rates, the Democratic Party would cease to exist overnight.”

It’s funny you mention that, because I’m convinced that if a critical mass of Americans were advised to put their retirement savings into deregulated stock markets that will inevitably plunge, people will lose huge percentages of their retirement funds and the Republican Party would cease to exist overnight.

All of this clamoring means nothing. The patients are running the insane assylum. There just are not enough people of fiber that can recognize a rat when they see one. Fewer are willing to take the steps necessary to rid their house of these rats. Some rats are red, some are blue. Where are the rat hunters who will fight for the Red,White,and Blue!?

With regards to partial privatization, a scholar (former principal deputy commissioner of the Social Security Administration)over at “Forbes” ran some scenarios. It was for putting a portion (not all) of your SS taxes into a private account.

Only under ONE scenario did a person receive less money from private investing than from SS benefits, and that loss was 0.1%. This was even assuming the stock and bond market over the past year. The key was that for people over age 55, the stock to bond mix was 15% and 85%.

PLUS, the citizen would have OWNED that privatized money (and could pass it along to heirs) as opposed to the “promise” of pay from Congress that would end with death.

“Suffice it to say, my return from SS will be negative, so I can support “good for nothing parasites” like some of our esteemed PJ Media commenters in retirement. This is God’s little joke on me, I can feel it.”

venividivici,

My response to you concerning your comment is “kiss my ass”. I will be retiring soon – if possible and unfortunately, I will have to depend on SS for a portion of my income. I have paid into this program for my entire life and as such, have a right to certain expectations and receiving returns on my considerable investment in the program and delivery of promises made by the con artists in Washington.

I owned my own business but when Bush I went back on his word and the “read my lips” lie came to fruition, the impact caused many of us to close the doors or declare bankruptcy. My partner and I worked our butts off to pay every debt we owed and refused to hide under the cover of Chapter 7 or 11 to avoid our legal and moral obligations to vendors and clients. After paying everyone off and selling my home and all assets to honor our obligations, I had to start again with ZERO. During the last recession, I was among the 15% of the work force at the company I worked for and was out of work for several months. I had built up a 401k that would have provided my wife and I a decent retirement fund but had to use it to combat a non-compete requirement by the company I worked for. This was the second time I have been placed in the position of starting over.

So, if you want to include me among too many others who have been faithful to our system and have contributed all of our lives and describe us as “parasites”, go right ahead. This is the type of comment and attitude that continues to turn potential conservatives and Republicans toward the Democrats. Your comments diminish our contributions over the years and in the end, I will damn well guarantee you our contributions will exceed yours.

The left has told us for long time there is no problem with SS.
They beat the table (all recorded on video mind you) that there was nothing wrong with Fannie & Freddie .
There is never anything wrong with their pet projects, that is until the shoe drops. Then it is finger pointing time as long as the finger is not pointed in their direction…

and for the poster crying how privatization would be a disaster, ok for a handful of years out of the last 100 things would have been rough but the rest of the time would have been very good returns far outstripping the crap SS provides.
Take your fear mongering bs outta hear, it only proves the left is committed to the empowerment of the party not the American people.

And here’s how we’re really going to be defrauded: Those SS checks that were going to be worth, say, $1000. per month? How much you s’pose they’ll be worth after the government prints money to pay for the current spending riot they’re engaged in? That’s what governments do. They borrow money, then inflate the money, so they pay back the debt in dollars worth much less than it was when they borrowed it. Want to guess fifty cents on the dollar? Twenty-five by the time you start getting your checks? Another reason the government cannot be trusted with our money.

We are currently experiencing the biggest government rip-off of American taxpayers in history. While your money sits in a savings account, cd, 401K, or under your mattress, it’s being stolen from you day-by-day as long as this spending spree continues.

Yep, Mr. Blumer. It is called a “Pyramid scheme” and they eventually collapse on themselves in the end. Social Security [thanks Roosevelt] was never meant to be used as a retirement in the first place, the people paying into the ‘scheme’ were supposed to die before they ever got a chance to ‘cash in’. Now people are living much longer and ‘OOPS’ the piggy bank has already been raided. Nice huh?

11. goy stated, “The number of Americans who pay no income tax (i.e., government employees plus the 50%+ filers with no or ‘negative’ tax liability) now comprises an electoral majority.”

I work for the government and when I look at my leave and earning statement there are deductions for the following: OASDI, FEDERAL TAX, MEDICARE, STATE TAX. the deduction for OASDI is almost 9 times the amount deducted for FERS(Federal Employee Rertirement Savings). The old system of federal employees not paying into OASDI has not been available to new hires for over 10 years. My father was one of those and his SS benefits are a LOT lower than if he had paid into SS.

19. Steve P.: It’s called being responsible for yourself and not relying on the government to take care of everything for you!

How did my father do as a federal employee not paying into SS for over 20 years and being able to invest the money on his own? His return on his retirement investment is much higher than if he would’ve relied on SS. (He does get a small amount of SS from the years he paid into it while he was active duty.)

The “defeat,” and their “victory,” is letting it get to the point where benefits and costs exceed receipts.

I would be the first to celebrate if my assessment about the achievability of private accounts in light of this apparent loss is wrong, and would be very glad to work as hard as I can to prove myself wrong to get partial or full privatization.

However, I believe there is no historical precedent for a nation with such a deep hole in its retirement system ever returning control over it, even partial control, to its citizens.

I’m sorry if my slip into temporary pessimism is hard to swallow. Those who want freedom are going to have to regroup in light of this particular apparent defeat and figure out how to do what I believe no one else has ever done. I’m not saying it can’t be done. I am saying at the moment that I don’t know how it can be done.

@25 Joe Ferguson: - While your money sits in a savings account, cd, 401K, or under your mattress, it’s being stolen from you day-by-day as long as this spending spree continues.
Notably, that theft disproportionately affects those who’ve chosen to save, rather than spend, borrow and spend some more… or live off the taxpayer.

@28 Ms. Attitude: - I work for the government…
Agreed. Just my sloppy shorthand. To be more clear, as a government employee you pay federal income tax out of a salary derived from… federal income (and other) tax, i.e., taxes paid by others in the private sector. Government employee salaries are a net drain on the Treasury in ways not much different from those tax filers with ‘negative’ tax liability. The point is that those benefiting from this arrangement (now a majority) are likely to be more supportive of preserving it than those who are not benefiting.

15. ate mely: “Federal and some states do not participate in SSS. How are those retirement programs doing? Never read about federal and state employee pension program in crisis.”

Here in Pennsylvania, the state government has raided employee pension funds for state employees, as such and of PSEA (Pennsylvania State Education Assoc.), that I’m aware of. Of course, PSEA is a public pension fund, not private. I don’t know if they raid the private ones or not. So far, they haven’t touched mine but mine is paid through an out of state entity.

I think you’ll find that most pension funds are invested by the companies that hold the funds, much like banks invest our money and pay us interest for the use of it. But I doubt the state bothers to pay interest on what they borrow from those lucrative pension funds.

And why would this be any different than the feds using SS for other purposes, than its intended? Regardless, it’s a sleight of hand maneuver and one fraught with possible (probable) bad consequences.

31. goy: We like to say, “the government giveth and the government taketh it away!” All at one time! As an employee, we work for our government money, unlike others.

As for Social Security, I don’t know if there will be any left by the time I retire but I won’t complain about paying into it. I know the people who are retiring now planned their futures based on recieving the payments. I won’t plan my retirement based on SS that way if it’s not there I won’t miss it.

Factually SS never returns a positive investment. One needs to add the amount the employer pay in is as your contribution as well. SS is a sure loser which makes the arguement that the market is a loser sound hillirious. The market over long term has always produced positive returns.

In fact if one were to place their ss into a government regulated system even a waitress could retire with enough to actually have a dignified retirement. There are plenty of ways to safeguard against a market downturn/crash. It is as simple as requiring that one must move out of the market as one nears retirement say age 55. If the market crashes near that date one would be allowed to stay in the market until it recovers. You would have a ten year window for most retirements. More than enough time unless a dimwitcrat is in power.

The main impediment to a real retirement SS … a private owned one, is that it would empower people and that would be the death of the left/dimwitcrat control.

“I had built up a 401k that would have provided my wife and I a decent retirement fund but had to use it to combat a non-compete requirement by the company I worked for”

Let me get this straight, you signed a contract and it contained a non-compete clause”. You then used your savings to break your word after you got trained and exposed to needed contacts by the company you worked for. And then you complain about doing so.

One of the other reasons that SS will go flat before it’s time is the when old Slick Willie ended “welfare as we know it” a very large portion of the unproductive slugs sucking that teat suddenly developed disabilities and began to draw from SS. If you play your cards right you can about $1400 a month as “drug addicted disabled person”.

Most of these people have never worked, are also on the dole for their extensive drug-related medical problems and will probably live long enough because of that money and care to be a carbon-spewing problem for many decades.

If you can stand it go by a Social Security Office and watch the people there, and try to spot somebody that has actually contributed to the system. What you will find en masse is foreigner-born non-contributors on the dole and twenty-year old dopers taking your and my money to buy drugs with etc.

My boss can require a clean urine test from me at any time as a condition of my employment, why can’t we at least demand the same from people that haven’t paid in before we give them a check our of OUR account?

Federal and some states do not participate in SSS. How are those retirement programs doing? Never read about federal and state employee pension program in crisis.

Here in CO, our state pension fund – PERA – has been in trouble for years. They had the habit of increasing benefits and reducing the retirement age when times were good, now they can’t fund everything when times are bad.

I was a state employee for 10 years, it was a great deal. Although I would still love to retire at 55, I prefer the private sector.

You’re all going on about those things that are constantly hammered on (rightfully so), but are ignoring the obvious:

We MUST get rid of all current politicians, democrat and republican! They, and their equally guilty staffers,are destroying this nation. Until we clean house, put in term limits, and restrict how politicians earn their living, this country doesn’t stand a chance of returning to our former position of the greatest country the world has ever seen.

People that are actually concerned about our country cannot deny that this must be done. With few exceptions, the current crop of politicians don’t care a wit about this country or their own constituents – only about the next deal that enhances their own bottom line. This is the only kind of revolution that is meaningful, and the only type that will work for the country. We must get rid of ALL incumbents beginning in 2010 – and continue until the job is completed.

Believe me Reid, Pelosi, Dodd, Franks, Waters, as well as the likes of republican homesteaders are not going to go on their own – it’s too profitable!

@38. anton: This problem is much, much worse and far more pervasive than most people realize.

Also note: in addition to the $1400 (or whatever) SSDI benefit someone receives who is “too depressed to work”, “too obese to work”, “disabled from past drug abuse”, etc., they also get taxpayer-funded health care, taxpayer-funded transportation to/from psychotherapy and other places, taxpayer-funded prescriptions (and there are usually tons of these)… the list is rather mind-boggling. All discussed previously, here.

It’s not clear how this drain on SS is being calculated into the long-term viability of the system. But now that attorneys have made a new niche market out of “assisting” individuals in getting their ‘rightful’ SSDI benefits, it’s a safe bet that the impact is going to be significant.

And about all that nice welfare reform that was Clinton’s one and only positive contribution to the Republic? As of last month you can just kiss all that good-bye. Unless the provisions were stripped out of both bills when the House and Senate versions were resolved (I’ve looked, but not found anything on this), welfare reform was pretty much canceled out by the new funding rules in the massive Porkulus bill that was rammed through Congress with no analysis and no debate. Basically, we’re back to States competing for federal funds based on the number of cases they manage to cram onto their welfare rolls.

One of the other reasons that SS will go flat before it’s time is the when old Slick Willie ended “welfare as we know it” a very large portion of the unproductive slugs sucking that teat suddenly developed disabilities and began to draw from SS. If you play your cards right you can about $1400 a month as “drug addicted disabled person”.

Most of these people have never worked, are also on the dole for their extensive drug-related medical problems and will probably live long enough because of that money and care to be a carbon-spewing problem for many decades.

If you can stand it go by a Social Security Office and watch the people there, and try to spot somebody that has actually contributed to the system. What you will find en masse is foreigner-born non-contributors on the dole and twenty-year old dopers taking your and my money to buy drugs with etc.

My boss can require a clean urine test from me at any time as a condition of my employment, why can’t we at least demand the same from people that haven’t paid in before we give them a check our of OUR account?
Apr 3, 2009 – 11:48 am
______________________________________________

What are you doing here? Trying to bring in some since of Responsibility??
The nerve of you. I’m appalled I tell you, utterly appalled that anyone in this day and age still clings to those outdated old school ideas… personal responsibility?
Just mind your own business, I’m here to get what I can from the gov’s teat, I am entitled to it , I earned it because I am sure I have been discriminated against somewhere,, I’m sure of it and when I figure out just where that was I’m gonna ask for double what I get now… So bug off buster… outta my way.. I’m gonna get first in line for anything as long as its FREE. Well as long as some one else is payin for it anyways…
uumm.. did I tell you to bug off already.. whatever…. Hail the messiah,, Obama/Chavez 2012

What Obama and the dems are doing to our economy Right Now! is absolutely no different than what the federal gov`n has done to SSI since its inception in 1935.
It
They are stealing OUR money for their own self interest. It should be apparent to anyone willing to listen that Obama should be a one-termer. If he gets elected again we are cutting our own throats…

Great article. The best way to fix this now, would be to chop the benefits down proportionately according to how negative the cash flow is. Therefore, they’d reduce very slightly for 5-10 years, and eventually be about 40% smaller. Under NO circumstances should the taxes be raised. Unfortunately, this SS scheme has taxed us 15.3% which was WAY too much with benefits to large as well. What a disaster our govt has wrought since the 1930s. Think about it, if fed, st, local govts didn’t tax us so damn much, we could save for retirement easier, and save for health insurance and houses easier. All would have worked better, without the high taxes of the Democrats. They have truly ruined our economy since the ’30s.

It is not my intent to anger the majority of readers here, although I probably will do just that, I just want to give a personal example of the difference between social security and a real retirement plan.

In 1974 I accepted a job with a semi-governmental agency. As such I was allowed to opt out of social security. The government employees who set up the SS ponzi scheme knew from the get-go what a rip-off it was and wanted no part of it for themselves, so they allowed government workers to opt out. Of course, I did; it was a major enticement to accept the job.

By law we still had to contribute the equivalent amount out of our paychecks for retirement coverage, it was just put into a private fund managed by competent financial experts who couldn’t divert the money to another purpose. So, for the first 15 years I contributed the exact same amount to my retirement fund as other citizens contributed to social security. Then our fund, earning more from the interest than we were contributing, became so severely over-funded that we ran up against another government regulation preventing the fund from accepting any more contributions. My agency then cut our deductions in half and invested the rest in a 401k-like plan. So for the next 15 years I paid one-half what the social security victims had to pay.

The result: I retired in 2004 after 30 years of service at the age of 55. I am receiving a lifetime monthly check for $4,300, a yearly COLA, and full HMO medical coverage (albeit with a few $15 co-payments for most services – less than I spend per year on soda pop). If I die before my contributions plus interest runs out, my heirs inherit the remainder. This money comes from a fund that accepted no tax-payer contributions at all, it was fully funded by the workers at less cost than SS. Since it is not dependent on the tax payers for anything it cannot be diminished unless by un-constitutional means, or runaway inflation, which I do fear, greatly. The COLA has limitations. Anyway, compare that to your social security “benefits”. That’s how the government runs things. GO SOCIALISM!

If you can stand it go by a Social Security Office and watch the people there, and try to spot somebody that has actually contributed to the system. What you will find en masse is foreigner-born non-contributors on the dole and twenty-year old dopers taking your and my money to buy drugs with etc.

Better yet-
Take a look at any shopping mall disability parking lot.

Watch the ones that are really disabled and having to live on disability income.

Their cars are 10-15 years old and most limp or have to be wheel chaired into the stores.

The ones sucking the gov. tit drive brand new Mercedes and Lexus four runners and can run in and out of the rain- Also note that they don’t have to run very far.

The government doesn’t find it strange that a disabled person drives a 50k car?

The Democrats have been itching to turn the US into a Nanny state and guess what…they are getting their wish. So many brainless twits who suckle at the government teat with nary a thought of being self sufficient. If only they would let us invest our own Social Security money how we want. Imagine the returns we could get. But again, the Nanny state Democrats have no faith that the average American has the sense to fend for themselves. No wonder there’s so many on welfare, WIC, etc. The Democrat ideal is to suck the lifeblood out of independent American thought.

In my state, non-compete contracts are not looked upon favorably except under the strictest of terms and they cannot be too broad based. When I tried to find other work, because of the nature of the non-compete, no one would talk to me about employment. This same employer had been challenged by others and each time, the courts ruled against the employer because the non-competes were too broad based and punitive. Even with this knowledge, no one was willing to take the chance of being sued because of the reputation of my former employer as being overly litigious. And, I was forced along with dozens of others to sign the non-compete years AFTER coming to work for the company. Either sign or lose my job.

When you are 60 years old, choices are limited and well paying jobs hard to find. As a matter of honor and courtesy I asked my former employer to release me from the non-compete so I could accept a job in an unrelated segment of the industry we were in and would not be in competition with his company. He refused even after I had brought in the highest combined dollar volume in business during my time with the company than anyone else.

When we had our first hearing in front of the judge, the first thing the judge asked their attorney was “if you let this man go for no reason other than a cutback and he is not going to be rehired, how can you reasonably expect to force him to honor a contract that is not held in a favorable view by this state anyway? He didn’t break the contract, you did.” For what its worth, I won my case even though it cost me everything I had saved.

What I am is someone who will not submit to an injustice and this was one. I did what I had to do so if that is a sign of being a liberal, then I am a liberal. For the record, I am a conservative and have been one all my life. There are some things like this one that has no label other than greed and purposeful malice by someone with a small soul. This may not be the forum for personal history but I thought it was needed as a response to your comment.

Everyone below 40 loses SS and what they paid in, BUT they no longer have to pay in. Everyone above 40 gets the same option. When the last person currently above 40 dies, SS is ended. The disability payout is privatized. So everyone has at least 25 years.

To cover the system’s cash drains, the government will have to, in some combination, raise taxes, borrow more, or reduce benefits, year after year after year.

You forgot one other possibility, massive inflation of our currently. That’s where all of this is heading: trillion-dollar stimulus packages, artificially low interest rates, budget deficits and increases in spending without corresponding increases in taxes, tons of business and consumer debt, and now a fixed annuity owed by the government.

Hyperinflation is how SS, and alot of other things in our economy gets “fixed”; our currency collapses in value, but the payments out of Social Security remain the same dollar value. Of course, the world economy as we know it would be trashed, and who knows what would rise out of its ashes.

My hope is that, out of this mess, some private barter currency would arise the value and quantity of which fundamentally couldn’t be controlled by any government. That we would see a “separation of capital and state” so to speak, and a resulting weakening of state power that would be the dawning of a new libertarian age. A man can dream . . . .

Are you kidding me? It’s insolvent now like any Ponzi scheme. Just because Madoff made payments to investors doesn’t mean his operation was solvent at any point. It became insolvent the minute it used new investor money to pay old investors. That’s exactly what social security does.

@46. fear obama:- Take a look at any shopping mall disability parking lot. Watch the ones that are really disabled and having to live on disability income.

You should take care with this one, f.o., as it’s not necessarily a reliable measure. My wife has limited mobility due to advanced M.S., and therefore qualifies for handicapped parking. Neither of us is receiving any disability income. Rather, we’re paying out plenty in State and Federal taxes for those who do.

Working your whole life, paying off mortgage, investing in stocks and your social security would keep you o.k. for your golden years….Now there is class warfare and age warfare, ie parasites….my stocks are off 60% and now capital gain tax going up up up, my property tax going up upup and value of house going down….parasite…..no hardly, lost job, illness, etc.
whoopee just another parasite…….next step just kill off everybody over 60 right? Your pole dancing, american idol generation is so sterling.

I don’t give a flying f*ck what you’re convinced of. My statement was based on an actual insight into how the left keeps people innumerate in order to perpetrate its moronic scams. Your “insight” was based on nothing, cuz you got nothing.

#23 Bart

And my response to you is I’d rather you die starving in an alley than get one more red cent from me. As if I care that you continue to exist. Mirabile dictu, I care more about my family and what I can leave them than I care about total strangers who just happen to share the same patch of dirt on this planet with me. Boy, how odd of me. If that attitude is what differentiates Republicans from Democrats, all I can say is that Republicans are on the side of Darwinian evolution and Democrats aren’t.

My guess is SS will become a flat payment, no matter how much one has paid. That is how Japan’s national pension scheme works (actually, it’s failing, too). Inflation will outpace it, however.

I’m not sure what your guess is based on, but it sounds unlikely to me. More probably SS will become a graduated, means tested payment, and payroll taxes will be expanded to be less regressive. More like a safety net is the future I see for SS.

13. venividivici:

I’m well aware of the long-term performance of private equity. Nevertheless, the volatility of these markets is not the most appropriate exposure for a dedicated retirement safety net. Such a program needs to be guaranteed and that is something the markets cannot offer.

Yes, private equity has better average returns – but people don’t live on average returns, they live on actual returns. Without taking steps to protect investments against the vagaries of capital markets and inflation, social security will not be able to fulfill its mission. But you knew that.

14. MarkD:

David S, nice try but no sale. Diversified investments suffered some losses but outperformed SS by a wide margin over the period I paid into Social Security. Blaming Bush for a problem that has existed since the program’s inception might work, because some people will believe anything. It won’t fix anything. When the money isn’t there, the system has a problem.

I wasn’t blaming Bush for a problem that existed since SS’s inception – just for incompetent leadership during his term in office. Social Security can be made solvent forever with some simple adjustments. Remove the ceiling on payroll taxes and means test the benefits, and the program is self-funding. It’s not rocket science – just math. Unfortunately math has never been the strong suit of the GOP.

When was this problem first really understood? Early 1980′s is when I remember the basic outlay of the system being explained and how it wasn’t sustainable ‘to 2050′. Really, a lifetime away! Surely someone would be smart enough to figure out a way to continue it, no?

Then that time horizon started to creep back and folks coming into the workforce started to ask the basic question: will this program survive the first wave of the Baby Boomers retiring? That would start in the mid 2000′s, certainly the first would show up before 2010. Then the rabbit in the snake would start to shift through the system and folks were just living longer… much longer… than they were in the 1930′s. Of course that was demographics that had been going on for decades before then, save for the influenza epidemic, and that didn’t change the life expectancy long-term upward trend. So Boomers will live longer, and be living off those who were still working.

The post-Boomers came to the answer that demographics and the Baby Boom will destroy Social Security. What you paid in would not be coming back to you. The system would lose liquidity and then solvency as the Boomers lived longer, consumed more and overall demographics changed the system. Which was insustainable when it was first started. This strange ‘social contract’ that the Left touts is now looking like another sort of ‘contract’ given to Mafia hitmen.

I worked directly in the federal government, DoD civil side and pushed the maximum pre-tax pay into the Thrift Savings Plan account, useable after retirement. And when the percentage went up, I increased to follow it. I don’t expect SSN to be there for me, as I came down with a disorder that does not allow me to work and the way SSN is set up is to say: ‘No’. And it takes an expert to fill out the forms for SSN, and when I was done my stack of reports, exams, test resulst, conclusions and so on was over two inches high. Luckily I never expected a dime from the organization… still don’t. My annuity is enough to cover very basic expenses and a little bit of income from investments fills out the rest, and a couple of those will take the full-blown collapse of the economy to end. I am not rich and barely middle class by income and after medication payouts that isn’t really a good indicator of financial well being. I led a spartan life relative to my age cohort, and still do. And I expect the lessons taught to me by my extended family about the Great Depression will serve me well for the next few years, while Americans try to figure out if it is really worth impoverishing the young and not so rich along with the rich to pay for the Baby Boomers retirement.

My measurement for ‘bad times’ is that of my late Uncle Edward who, when hearing how bad things were, would look out the window to the street, and say: ‘Can’t be that bad. No dead bodies in the street.’ Of course he lived through the influenza epidemic.

What’s the difference between LBJ using Social Security for “general government waste” and a company like (say) GM looting the pension plan of its employees?

To my mind, those who point out that privatizing Social Security “can’t work” are just saying that government can do a better job with our money than we can. In the current context, that is a really weird point of view.

Or — put the question another way. If you received (tax-free) 15% of your paycheck and were only required to invest it SOMEWHERE, you don’t think you could take care of your own retirement? Let’s say you make $50,000. 15 percent of that is $7500 per year. Heck, put it in savings and you’d have $75,000 after just ten years. Put it in T-Bills and you’d be doing better. Put it in equities and you’ll be doing MUCH better in the long run. I’m not going to get out Excel, and I’m not an accountant, but with interest compounded and re-invested, I don’t see how you could wind up with much less than $600,000 — on top of what you save on your own. Remember, that 15 percent is “pure gravy”. If you personally save another 10 percent on top of that, you’ll have over a million when you retire. And — the real kicker here — it’s YOURS. You can leave it to your children so they don’t have to begin at zero.

Of course, most people spend every penny they can lay their hands on, so individual responsibility would come into play. And so ideas like this would never win in an election.

“Two more thoughts:
1. Blaming the Democrats for Bush’s economic policies is not going to sell.
2. Privatizing Social Security was never a good idea. We can all see how “secure” private investments are. That’s not what retirees need.”

If you’ve only got 2 thoughts, you should try to make them more intelligent.

1) Get off the Bush-hating bandwagon already. Not only is that over, but Bush only continued what has been a consistent trend for 40 years or more WRT SS. Blaming Bush for everything is OLD, OLD, OLD. Just please STOP. The new thing is to blame Obama for everything, followed by whoever the next prez is.

2) Privatizing social security may or may not be a good thing, but a dip in the markets doesn’t prove it one way or the other. If you believe that, you have the attention span of a toy poodle with ADHD. Someone who started putting into a privatized indexed fund in, say, 1984 (such as moi), has done FAR better than someone who got a SS-like return overall, “Bush’s/Obama’s depression” included.

Of course, given what Obama’s “economic dream team” is busy doing to the dollar, we’ll probably need to get a 1000% return on our investments to break even with inflation before long. Right now, I suspect the smart move for everyone with an IRA, 401K, etc. is to just cash everything in, eat the early withdrawal penalty, keep the cash you need to live on for a year and use the rest to buy physical gold bullion coins to bury in the back yard.

Not kidding about the gold. I don’t blame China for getting antsy about lending us more cash. We’re just a very bad credit risk right now. I actually sort of judge them for not cutting us off a decade or so sooner. But maybe part of their global domination plan is to tank us. They’re doing well.

It’s not rocket science – just math. Unfortunately math has never been the strong suit of the GOP.

Please. I owe my entire, fairly lucrative, professional career to my facility with math and I wouldn’t be caught dead supporting a single leftist policy. The reason I gave up my youthful leftism is because that whole side of the political spectrum couldn’t analyze it’s way out of the proverbial wet paper bag.

Why not bribe the older folks, like me, not to take Social Security? Remit my social security taxes if I don’t take social security at my “retirement age” and let my company keep its contribution.

I win because I amke more money, keep working and probably am healthier as a result. The company wins because it keep my experience and makes a little money to boot. Social security wins as it doesn’t have to pay out – almost as good as if I died. Everybody wins since the government doesn’t borrow to pay out money it doesn’t have.

61. venividivici:- I owe my entire, fairly lucrative, professional career to my facility with math …
veni’, our resident Blue Lemming was of course referring to the so-called new math (close relative of newspeak). It’s that “re-envisioned” math where 2 + 2 = 6. It’s the type of math that allows SSI to add up to something other than a massive Ponzi scheme.

59. Agoraphobic Plumber:- I don’t blame China for getting antsy … But maybe part of their global domination plan is to tank us.
They’d be stupid to expend any effort in that regard, since our government is doing extremely well at destroying our Republic with little or no help from the outside.

After reading this article which I believe is true and factually correct can one have confidence that the Government will be successful in running a “universal” health care system. It will not be successful and it will look just like the SS system detailed above.

The only consolation is that baby boomers will be making up an ever-increasing percent of voters. So, I suppose its our turn to be selfish and consign our children and children’s children to a life of paying half their wages to us and accepting far less governmental benefits during their lifespan. Why do I say our turn? Because the current generation receiving social security will be the only generation receiving a positive rate of return on their FICA withholding. Most all of them have paid a much smaller percent of salary received over the work life on average than the next generation after them.

Nice. I should have known that “math” didn’t mean what I thought it meant. I see this week that they’ve also invented “new beauty” where Michelle Obama is somehow beautiful enough to intimidate Sarkozy’s wife Carla Bruni into not wanting to compared “unfavorably” to MO. Makes about as much sense as anything else they say, which is none.

Nobody on this board really gets it. You are all concerned with money. But, money is merely a representation of goods and services available. Money is how we allocate those goods and services.

In many ways, pulling the money from one account and putting it into another is all smoke and mirrors. If you privatize SS, you will not likely get the returns in real dollars from private markets that have been the historical norm, unless… unless the money privatization stokes productivity so that more goods and services are produced. No doubt, it would, to some extent, but enough to support the incipient burgeoning leisure class? Probably not, and unless there is some deux ex machina ready to leap out onto the stage through, e.g., limitless fusion energy or some other great advance, we are f___’ed.

This is the fundamental, underlying issue. In the very near future, we are going to have to produce a lot more goods and services with fewer workers. The ONLY way that can happen is with massive increases in productivity. It doesn’t matter if it is a federal dollar or a private dollar, if the goods and services are not there to buy, the dollars will not be worth as much. There are no shell games you can play with the money that will change that reality.

That is why our policies should be geared toward growth. The more goods and services there are available, the more the same supply of dollars is worth, and the more wealthy is the society.

Unfortunately, we are currently massively indebting ourselves, significantly to foreign borrowers, in a non-growth oriented fashion. That means that we must siphon off an increasing share of the goods and services we can produce to foreign lands. Obamaconomics will reap its full reward when the US becomes a sweat shop to produce goods and services for Asian creditors.

Being a Republican or conservative does not necessitate becoming a total asshole and the face on the poster describing the mindset and attitude of those who are responsible for the greed and corruption on Wall Street but you are perhaps the perfect example. All for me and mine is a perfect attitude and formula from people like you who seem to be content to relegate conservatives and Republicans to the political trash pile and a footnote in history.

I can only hope that no one related to you is ever in need of any assistance, especially your parents. But, I am sure if they were to ever reach that point in their lives, they can join me starving in an alley while waiting for anything from you. I bet Mom and Dad are very proud of their little venividivici. Just like the abortionist supporting Democrats, I would bet you are one who supports euthanizing anyone older than 65 or retired. Yep, Darwin would be proud to call you son.

By the way dipsh@t, I paid into SS for over 45 years and am still paying because I still work. I expect to get back every penny I paid in if possible. Hell, I may live long enough to drain off a few pennies from your contribution. Now, wouldn’t that be a kick in the ass for you?

Apparently you’re the poster boy for people who think that wanting to keep the fruits of your own labor is “greedy and corrupt” and the poster boy for people who think that it’s the role of the state to force people to contribute to a system that virtually GUARANTEES they will not get back what they paid in, unless I happen to live to be the oldest man in the world. Good for you for paying in to SS, but it’s not really like you had a choice, is it? I’m not saying that you shouldn’t get your payout, but let’s stop accruing liabilities by getting the government out of the income annuity business (which is what SS really is, with a disability/life insurance component added on).

If anyone in my family needs something, I’ll have 12.4% less to give them, thanks to SS. And yeah, my family will always come before anyone else. In fact, in today’s globalized world, I probably have more in common with an entrepreneur in China who’s just trying to make it in this world without asking for a handout than the lazy Americans continually trying to pick my pocket.

And for the record, I don’t support euthanizing anyone, but I obviously do support people pulling their own weight.

David S.: say we concede your points above that Bush rather than Dems caused economic decline in 2008, and that social security will never be privatized. So what? Where’s the money coming from for the massive future ss, medicare and medicaid deficits, genius?

Oh, I get it, just raise taxes and means test to raise the trillions. And of course there will be no supply or GDP effect because everyone knows you’re just as incentivized and work just as hard when your marginal tax rates go up to 65 or 70 percent. (Or beyond.)

Oh, I get it, just raise taxes and means test to raise the trillions. And of course there will be no supply or GDP effect because everyone knows you’re just as incentivized and work just as hard when your marginal tax rates go up to 65 or 70 percent. (Or beyond.)

I already know his reply will contain some version of “In the 1950′s marginal tax rates were that high and economic growth was fine”. Which, of course, is a false analogy because in the 1950′s the country and the world were still rebuilding from WWII (not that we had literal rebuilding going on, but people were getting their lives together after the disruption of the war and new techniques in production were being utilized for the first time), which is not the case now. That the rebuilding was starting to peter out and those high tax rates starting to bite was one of the rationales behind the Kennedy tax cuts.

Also, even many supporters of SS don’t want means testing because they know that’ll mean that SS is just “welfare for old people” and the social insurance component of it will wither, as will support.

Where’s the money coming from for the massive future ss, medicare and medicaid deficits, genius?

Tax revenue, where else?

Oh, I get it, just raise taxes and means test to raise the trillions. And of course there will be no supply or GDP effect because everyone knows you’re just as incentivized and work just as hard when your marginal tax rates go up to 65 or 70 percent. (Or beyond.)

Higher income taxes seem to be associated with improved economic growth ever since the income tax was enacted. By collecting payroll taxes on all personal income, social security is made less regressive. Marginal tax rates would not need to exceed 50% – a level that has never been shown to reduce GDP growth. Incentives to collect excessive personal income are not necessarily the best policy to encourage reinvestment of profits – the real driver of GDP growth. And means testing is just common sense.

The blissful world of innumeracy … Must be nice, David S.

Yeah, I’m sure it’s wonderful to ignore the simple inequities that make social security appear to be in danger. Did you ever wonder why social security taxes don’t apply to the outsize incomes popular with white collar folks? It’s not really very complicated. Collect payroll tax on all personal income – why not?

@75. venividivici:

I already know his reply will contain some version of “In the 1950’s marginal tax rates were that high and economic growth was fine”. Which, of course, is a false analogy because in the 1950’s the country and the world were still rebuilding from WWII (not that we had literal rebuilding going on, but people were getting their lives together after the disruption of the war and new techniques in production were being utilized for the first time), which is not the case now. That the rebuilding was starting to peter out and those high tax rates starting to bite was one of the rationales behind the Kennedy tax cuts.

Actually I probably would point to the 1990′s, a much more direct analogy, with modest tax increases followed by balanced budgets. But that’s just me. You did notice that economic growth was much more robust when marginal tax rates were higher, and that growth has been weakest under the low tax regimes of the GOP, I’m sure. If you’d like to go back to the Kennedy administration’s tax rates – be my guest.

Also, even many supporters of SS don’t want means testing because they know that’ll mean that SS is just “welfare for old people” and the social insurance component of it will wither, as will support.

Means testing can be implemented in many different ways – and public health care as part of the package makes means testing cash benefits less onerous. Even the rich could be permitted a small stipend to help maintain broad support for the program – with benefits more generous for those without the independent means to support themselves. There are good reasons that social security has survived for so long – and the same good reasons will ensure that the funding mechanism and disbursement policies will be adjusted to maintain solvency indefinitely. We are going to experience a difficult period for the next thirty years or so, but once we have survived the demographic bulge of the baby boom, the picture grows much more sanguine.

The fix for social security is fairly easy and not very complicated – the medicare problem is much more serious and more urgent, so it is prudent of Obama to focus on resolving the health care crisis as a top priority. Social security is a non-issue by comparison.

David S,
Marginal tax rates would not need to exceed 50% – a level that has never been shown to reduce GDP growth.”

If nothing else you ever wrote marked you for being an idiot, that sentence did. However, pretty much everything you write is the same liberal bilge. Your faith in Obama is touching. It will be interesting to see if you cling to it when you see its results bringing your world crashing down around you.

I hope the conservatives who live around you know who you are and your political beliefs. They might want to hand out a little payback to the people who destroyed the country and they might just want to start with you. Here’s a tip: .308 does a real good job of turning cover into concealment. Remember that when you’re running away.

78. mac:- If nothing else you ever wrote marked you for being an idiot, that sentence did.

Actually, our resident Blue Lemming Dave isn’t an idiot – just willfully delusional. He’s no different from all the other socialists who think we live under a Constitution that gives career criminals in government the authority to seize half of the fruits of one’s efforts and/or wealth so they can use it to further their own political agenda or hand it over to someone who didn’t earn it (but I repeat myself).

Actually I probably would point to the 1990’s, a much more direct analogy, with modest tax increases followed by balanced budgets.

Again, the analogy doesn’t hold, as there was the one-off effect of the commercialization of the Internet driving growth.

You did notice that economic growth was much more robust when marginal tax rates were higher, and that growth has been weakest under the low tax regimes of the GOP, I’m sure.

The problem is that one can typically point to specific circumstances that allowed for more robust growth despite those high tax rates. That in no way implies that those tax rates were optimal. The more direct comparison is to compare the US’ growth with Europe’s growth over the past 30 years since Reagan, since both regions had the opportunity to take advantage of or be disadvantaged by the macroeconomic setting. The US has had about a 1% point/year growth advantage over that time, which means that even if both had started from the same place, the US economy would be double the European economy in a mere 72 years, about the average human lifespan. How anyone could be against policies that would lead to that outcome is beyond me.

I hope the conservatives who live around you know who you are and your political beliefs. They might want to hand out a little payback to the people who destroyed the country and they might just want to start with you. Here’s a tip: .308 does a real good job of turning cover into concealment. Remember that when you’re running away.

In my neighborhood, conservatives are in rather short supply. Your suggestion that they “might want to hand out a little payback to the people who destroyed the country and they might just want to start with you” sounds to me like a thinly veiled threat as well as the ranting of a deranged person. When conservatives stop frothing at the mouth, you might come to realize that my neighbors and I have you outnumbered.

I never planned on ever getting any SS retirement bens and have saved and invested pretty heavily to be self reliant apart from that system. If I get SS retirement, it’s frosting on the cake.

However, my ability to do that depends on a recovery someday, which seems more unlikely with each passing day.

There is no deliberation in our deliberative democracy.

The pale rider is wreaking havoc and destruction.

Companies and people are going to flee to freer economies and societies, who will be happy to have them.

At least I live in a high poverty area and know exactly who to go to, to learn how to work the system and get on SS Disability (much better paying than TANF), Medicaid, Section 8 housing, and EBT food stamps, and to learn where all the giveaways are. I will tap certain experts to mentor me in milking the system.

At some point it will be just so much easier to give up and be a slave on the government plantation than to try any more. When I have lost all my “HOPE” that’s when this “CHANGE” will happen.

Again, the analogy doesn’t hold, as there was the one-off effect of the commercialization of the Internet driving growth.

So much for analogies, then. There’s always something providing a “one-off effect” – that’s the nature of a technologically progressive society.You did notice that economic growth was much more robust when marginal tax rates were higher, and that growth has been weakest under the low tax regimes of the GOP, I’m sure.

The problem is that one can typically point to specific circumstances that allowed for more robust growth despite those high tax rates. That in no way implies that those tax rates were optimal.

Again, it’s that darn “one-off effect” isn’t it? So the mere fact that higher taxes are associated with higher economic growth rates is an illusion of “specific circumstances”. Got it.

The more direct comparison is to compare the US’ growth with Europe’s growth over the past 30 years since Reagan, since both regions had the opportunity to take advantage of or be disadvantaged by the macroeconomic setting.

Really? So the “specific circumstances” of the US couldn’t possibly cause a “one-off effect”? Even though Europe has been densely settled for centuries, and the USA has been freshly wrenched from native peoples? Interesting choice of comparison – but completely unrealistic.

The US has had about a 1% point/year growth advantage over that time, which means that even if both had started from the same place, the US economy would be double the European economy in a mere 72 years, about the average human lifespan. How anyone could be against policies that would lead to that outcome is beyond me.

It depends on whether one accepts your ludicrous comparison to start with. There are plenty of factors that provide the US with “one-off effect” advantages over Europe. Unfortunately most of the recent benefits have accrued to the rich in the US, which has inhibited economic growth by preventing the growth of the middle class. Economic growth is more robust with marginal tax rates at higher levels. It’s the nature of the market – higher marginal tax rates drive reinvestment and prevent profit-taking from weakening companies. If the government is going to provide incentives to the economy, cutting marginal tax rates is one of the most perverse things one can propose given today’s rates in historical perspective. Progressive taxation is good for the economy.

So the mere fact that higher taxes are associated with higher economic growth rates is an illusion of “specific circumstances”.

I think you’re making a correlation/causation argument in a situation that is actually an optimization problem.

Really? So the “specific circumstances” of the US couldn’t possibly cause a “one-off effect”? Even though Europe has been densely settled for centuries, and the USA has been freshly wrenched from native peoples? Interesting choice of comparison – but completely unrealistic.

By the time period we’re discussing (1980 and forward), urbanization in the US, while not as advanced as Europe, was well-established.

Unfortunately most of the recent benefits have accrued to the rich in the US, which has inhibited economic growth by preventing the growth of the middle class.

Most of the economic growth has been associated with technology and finance, two thing where the intellectual requirements for success are higher than what someone inhabiting most of the IQ bell curve is capable of. One can debate the merits of those intellectual efforts to-date, but one cannot debate that the people in the room are all very close to the top in terms of objective intelligence measures. In a competition where the minimum IQ necessary to succeed is 150+, people of “average” IQs around 100 simply aren’t going to win very often. Add into that globalization of labor markets and my only advice to people is “get smarter”. The old world isn’t coming back.

What drives re-investment is the availability of reinvestment opportunities. If a company has a cost of capital of 10% and the only reinvestment opportunities available return 9%, the company should distribute those earnings as a dividend to shareholders. Not doing so would weaken the company. I take it by your position on this you are not a CFO by profession?

First, I came from a very frugal upbringing because we were poor. I had enough good food to eat, usually, but sometimes it was beans and bacon back for a few weeks at a stretch with add ons from our garden.

Later on, our fortunes were better, but I still had to pay for the major portion of my College education. I got some funding from my service to my country, but it didn’t pay the bills. I worked days and went to College nights for about 13 years total.

After my degree was won (BSEE) My real career was just starting. I went from a small Engineering firm, HERCO, (RIP) to Big Oil. They laid me off at age 50…a bummer. that was 1994/5 and NO jobs to be found.

I was able to save and invest wisely over those working years and I did not think SS would be here for me, this year. I am now over 65, enrolled in the ponzi scheme, and will get my first check next month. Thanks young folks!

I was able to pay off in full my first house, buy country property and build a small “cabin” out here. I sold the first house at the top of the market and those funds went into our retirement reserves.

The point in all of this is if you are younger than me you need to put something away for the future. If you get SS fine, If not, you should be self sufficient and survive.

Here’s an idea, let’s buy out everybody from SS. All retirees shall receive a lump-sum payment equal to ten times their annual benefits, and all workers shall receive a lump sum equal to ten times their accrued annual benefits to date. The funds shall be raised by liquidating all the T-bills held by the Trust Fund (pro-rate these numbers if we can’t afford to pay 10 years’ worth). After that, the FICA tax shall cease to exist. Sure, we’d have to borrow an extra $4 trillion, but it’s worth it to have the $50+ trillion unfunded liability off of our balance sheet. The increased growth and savings from canceling the FICA tax will pay for the additional debt.

Actually, I am a confirmed capitalist and do believe those who earn it should be entitled to keep it. I am aware of the fact that I never had a choice when it comes to SS. None of us had the option to opt out unless you worked for the railroad and come under their pension plan like my in-laws.

Well, anyway, after all is said and done, we do share some of the same philosophy. I paid it in and I want it back when I need it. If all goes as I hope it will, I will remain gainfully employed and continue to contribute until I have to retire. My wife and I are finally able to start serious saving after finally paying off all of our past debts and obligations.

My final point is this. Not everyone is fortunate enough to be able to put away money from each paycheck. I know too many who have had to pay out every penny they earned for basic living expenses after a tragic illness or some other misfortune they had no control over. These are the people who should not be punished or held liable for the shortcomings of the government and the jackasses we keep sending to Washington.

If Obama succeeds in his efforts to retool America into a socialist state, all our our complaining and objections will be of no use anyway. We can state facts, figures, statistics, and logic until hell freezes over and it won’t make one iota of difference. We have a segment of our society who do think it is the governments responsibility to support them even if they keep plopping babies out one after another with no father in the home earning a living. And this is not a racial thing either. The percentage of caucasians having babies without fathers is catching up with the African Americans and fast.

This is where the money that was supposed to be for SS is going, not into the pockets of those who worked and contributed all their lives. If you want to get pissed off at anyone, check out just where most of the money is going. And now we have our hispanic brethern getting in line for theirs as well and our government is very obliging in putting as many as they can on the SS dole.

So, when the day comes when I will need my SS check to help out, I want all of what I paid in. If the government would be so kind as to send me a check for my contributions over the years, I could take it and live very well along with my income from my part time consulting business and full time position with my present employer. I just don’t want it going to those who never contributed or earned it. On that, we agree.

Most of the economic growth has been associated with technology and finance, two thing where the intellectual requirements for success are higher than what someone inhabiting most of the IQ bell curve is capable of. One can debate the merits of those intellectual efforts to-date, but one cannot debate that the people in the room are all very close to the top in terms of objective intelligence measures. In a competition where the minimum IQ necessary to succeed is 150+, people of “average” IQs around 100 simply aren’t going to win very often. Add into that globalization of labor markets and my only advice to people is “get smarter”. The old world isn’t coming back.

Oh, I’d be happy to debate you regarding the relative intelligence of our technology and finance ‘experts’. Perhaps a primer on the dot-com bubble? Or the current real-estate and finance collapse? Maybe we should review the S&L scandal? Take your pick. The minimum IQ necessary to succeed is nowhere near 150 points – and when you say the “old world” isn’t coming back, you should know that the statement means absolutely nothing here.

What drives re-investment is the availability of reinvestment opportunities. If a company has a cost of capital of 10% and the only reinvestment opportunities available return 9%, the company should distribute those earnings as a dividend to shareholders. Not doing so would weaken the company. I take it by your position on this you are not a CFO by profession?

I take it by your nonsensical reply that you are not familiar with the english language. Re-investment opportunities are subject to incentives. Tax policy is one such incentive. As a sole proprietor, it would make no sense to raise my personal income if I could reduce my taxation by allowing my capital to continue working as part of my business. This is not difficult to understand, but if you are having trouble, please go ahead and speak to your CFO.

My parents have been collecting SSB for 20 years. They have it all saved and guess who will collect when they die? Also, where did that SSB money come from? It came from the paychecks of many employees. A number of these employees, according to actuarial tables, will die by age 65 (on average) and never collect a dime of SSB. Who are these unfortunate workers who see 15% of their wage going to rich white retirees (and their heirs) while they and their heirs get nothing?

What about all of the millions of dollars that was borrowed from the SS trust fund years ago, and all of the interest that should have been built up from that loan. Why shouldn’t the government agency that borrowed that money be forced to pay it back into the SS trust fund, that should help somewhat.

At what point to we exercise our First Amendment right to petition for grievances?

We have numbers from the government saying this system is running out of money and there’s little confidence this system will remain solvent. As a small business owner, I demand to see this system reformed and know it’s sustainable before I continue paying money into this scheme. We should all petition the Congress, Treasury and White House and demand this be addressed and stop paying into this until they answer us!